UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES OF SMALL BUSINESS ISSUERS
Under Section 12(b) or (g) of the Securities Exchange Act of 1934
American Precious Metals,Inc.
(Name of Small Business Issuer in its charter)
Delaware 22-3489463
-------- -----------------------------------
(State or other jurisdiction of (I.R.S.Employer Identification No.)
incorporation or organization)
260 Garibaldi Avenue, Lodi, NJ 07644
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, (973) 335-4400
Securities to be registered under Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be registered each class is to be registered
---------------------------- ------------------------------
---------------------------- ------------------------------
Securities to be registered under Section 12(g) of the Act:
Common Stock, $.00001 par value
(Title of class)
<PAGE>
Item 1.Description of Business
American Precious Metals, Inc., (the "Company") was originally organized as
Lucky Seven Gas and Minerals, Inc., under the laws of the State of Pennsylvania
on July 16, 1984. The name was changed to Lucky Seven Gold Mines, Inc. June 24,
1996. American Precious Metals, Inc was formed January 13, 1998 under the laws
of the State of Delaware. On March 16,1998 Lucky Seven Gold Mines, Inc. merged
into American Precious Metals, Inc., the surviving corporation.
The Company intends to process precious metals using environmentally safe
process. The Company is working on several joint ventures with mining companies
in North America. The Company also, intends to introduce mining companies for
possible acquisition, joint ventures and financing.
Item 2.Management's Discussion and Analysis or Plan operation
The Company is considered to be in the development stage as defined in the
Statement of Financial Accounting Standards ("FASB") No.7. Management believes
it will be able to satisfy its cash requirements through debt financing and
sales of equity through private placements during the next twelve months.
However, there can be no assurance that the Company will be able to raise the
financing required. The Company intends to acquire, develop, process and/or
operate junior mining companies through majority owned subsidiaries or
investment in other mining companies through venture capital arrangements. If
successful in acquisition program, the employees would increase in proportion to
the company's acquired. At the present time the Company has not submitted any
proposals for potential acquisition.
In the next twelve months, the Company plans to seek out business
opportunity candidates. To date, the Company has introduced a Junior Mining
Company to several analytical labs and processes and a Finders Fee Agreement has
been signed. The Company plans to introduce other mining companies and the
Company believes that this plan of operations can be conducted through the
efforts of a current officer and will not require any additional funds. The
Company anticipates that the business opportunities will be available through
the contacts of Jack Wagenti, the Company's President. The Company anticipates
that the investigation of specific mining opportunities and the negotiation,
drafting and execution of relevant agreements, and other instruments will be
done by Jack Wagenti or under his direction. The Company plans to investigate,
to the extent believed reasonable by us, such potential mining opportunities.
Due to our limited experience and resources in business analysis, the Company
may not discover or adequately evaluate adverse facts about a potential mining
opportunity.
Inasmuch as the Company will have no funds available to us in our search
for mining opportunities, the Company will not be able to expend significant
funds on a complete and exhaustive investigation of potential mining
opportunities. The Company anticipates that it will incur nominal expenses in
the implementation of our business plan described herein. Because the Company
has no capital with which to pay these expenses, our present management, which
consists of Jack Wagenti, President, and Dr. Emanuel Ploumis Chairman of the
Board, CEO, the Company's CEO and President intend to pay all expenses with
personal funds as loans to the Company.
The Company's management has no future obligation to provide the Company
with future loans or contributions. The failure of our management to provide
loans or contributions in the future could prevent the Company's plan to seek
out business opportunities.
YEAR 2000 COMPLIANCE. The Company does have a computer that is in
compliance with the year 2000. Management does not anticipate that there will be
any consequences, material or immaterial, negative or positive, to the Company
as a result of the Year 2000 computer problems. As a result of a Business
Combination or merger, however, the Company may inherit computer systems that
are not Year 2000 compliant, or enter into contracts or business dealings with
suppliers, contractors, or others that are not Year 2000 compliant. Management
cannot anticipate the impact of such future occurrences. Failure to
satisfactorily address the Year 2000 issue could have a material adverse effect
on the Company.
<PAGE>
Item 3.Description of Property
The Company currently has no material assets, and the Company does not own
or lease any real or personal property. The Company currently operates without
charge out of space donated by the Company's President, Jack Wagenti, at 260
Garibaldi Avenue, Lodi, NJ 07644, his home.
The Company has no policy with respect to investments in real estate or
interest in real estate and no policy with respect to investments in real estate
mortgages. Further, the Company has no policy with respect to investments in
securities of or interests in persons primarily engaged in real estate
activities.
Item 4. Security Ownership of Certain Beneficial Owners and Management
The following table sets forth, as of the date of this report the stock
ownership of each person known by the Company to be the beneficial owner of five
percent or more of the Company's Common Stock, each executive officer and
director individually and all executive officers and directors of the Company as
a group. No other class of voting securities is outstanding. Each person is
believed to have sole voting and investment power over the shares except as
noted.
(a) Security ownership of certain beneficial owners
- - --------------------------------------------------------
Name and Amount and
Address of Nature of
Beneficial Beneficial Percent
Title of Class Owner Owner of Class
- - -------------------------------------------------------------------------------
Common Haber Inc. 510,417 6.07%
470 Main Rd
Towaco, NJ 07082
(b) Security ownership of management
- - -----------------------------------------
Name and Amount and
Address of Nature of
Beneficial Beneficial Percent
Title of Class Owner Owner of Class
- - -------------------------------------------------------------------------------
Common Dr. Emanuel Ploumis(1) 1,500,000 17.8%
1154 Eleni Lane
West Chester, PA 19382
Common Jack Wagenti(2) 1,500,000 17.8%
260 Garibaldi Ave
Lodi, NJ 07644
Common Jonathan E. Downs(3) 1,400,000 16.6%
27 Bush Lane
Denville, NJ 07834
Common Charles A. Fitzpatrick, Esq.(4) 50,000 0.6%
1111 Childs Ave
Drexell, PA 19026
Common Thomas F. August(4) 50,000 0.6%
308 E. Ashland Ave
Glenholden, PA 19036
Common Brian Russell(4) 50,000 0.6%
52 Doris Street
Kensington, South Africa 2094
Common Dale Truesdell(4) 25,000 0.3%
78 Reynolds Road
Shelburne, MA 01370
Common Includes all Officers and 4,575,000 54.3%
Directors of the Company
As a group (7 persons)
<PAGE>
(1) Dr. Emanuel Ploumis is Chairman of the Board of Directors and CEO of the
Company.
(2) Jack Wagenti is President and a Director of the Company.
(3) Jonathan E. Downs is Secretary/Treasurer of the Company.
(4) Charles A. Fitzpatrick, Esq., Thomas F. August, Brian Russell and Dale
Truesdell are Directors of the Company.
Item 5. Directors. Executive Officers. Promoters and Control Persons
Position
With Year First became
Name Age Company Director or Officer
- - --------------------------------------------------------------------------------
Dr. Emanuel Ploumis 73 CEO/Director 1996
Jack Wagenti 62 President/Director 1996
Jonathan E. Downs 23 Secretary/Treasurer 1998
Charles A. Fitzpatrick 51 Director 1998
Thomas F. August 46 Director 1998
Brian Russell 70 Director 1998
Dale Truesdell 56 Director 1998
Each director serves until the next annual meeting of Shareholders and
until his respective successor is duly elected and qualifies; Executive officers
are elected by the Board to serve at the discretion of the directors.
Dr. Emanuel Ploumis, D.D.S., Chairman of the Board / Director / CEO
- - -------------------------------------------------------------------
Dr. Ploumis has been in dental practice since receiving his DDS (Temple
University, 1961). Also, he is the former President of the Chester and Delaware
County Dental Society. Dr. Ploumis has served extensively as a consultant to the
courts and clients in legal issues. Dr Ploumis has been actively engaged as an
explorationist for more than 15 years with a small group of other
explorationists tracking for precious metal deposits. The discovery of "Manny's
Mountain" in Pennsylvania was an outcome of this activity.
Mr. Jack Wagenti, President / Director
- - --------------------------------------
Mr. Wagenti was formerly a Director and Secretary with Universal Turf, Inc.
and helped structured the company to go public. He was formerly a Director and
President of Santa Fe Gold Mines, Inc. Mr. Wagenti was a Director with Greenleaf
Technology, Inc. a public corporation.
Mr. Charles A. Fitzpatrick, Esq., Director
- - ------------------------------------------
Mr. Fitzpatrick was admitted to the bar in 1976, Pennsylvania and United
States Court of Appeals for the Third Circuit; and 1985, Maryland; Supreme Court
of the United States, 1990. Graduated from St. Joseph's Preparatory School; St.
Joseph's University (B.A. 1969). United States Navy, 1969-1972. Also, graduated
from the University of Pennsylvania (J.D. 1976). Law Clerk to The Honorable
Edmund S. Pawelec, 1976-1978. Mr. Fitzpatrick is a member of the Philadelphia
and Pennsylvania Bar Associations, Defense Research Institute and American
Academy of Hospital Attorneys.
<PAGE>
Mr. Thomas F. August, M.S., RPH., Director
- - ------------------------------------------
Mr. August graduated Philadelphia College of Pharmacy and Science and
received a Master Degree in Pharmacy and Chemistry. Mr. August was an Analytical
Chemist for Merck Pharmaceutical and became Senior Analytical Chemist at Merck
Institute for Therapeutic Research. Mr. August was Toxicology Lab Manager at the
Hospital of the University of Pennsylvania. In 1992 he worked at Sterling
Winthrop Pharmaceuticals and was team leader for the NIC Development Program. Mr
August is presently employed at United Chemical Technologies, Inc. where he is
manager of Laboratory Services.
Mr. Dale B. Truesdell, B.S., M.S., Director
- - -------------------------------------------
Mr. Truesdell, graduated from the University of Massachusetts and received
his B.S. in Geology in 1970 and his M.S. in 1974. Mr. Truesdell worked at Dames
& Moore doing geologic mapping for a proposed nuclear power plant. As a field
geologist for Bendix Field Engineering Corp., he investigated resources
potential for uranium in small and large scale areas. At Morrison-Knudsen
Engineers he did studies of rock and soil for major construction projects and
provided technical geologic support for a major superfund litigation. Mr.
Truesdell is also a certified Secondary school teacher for General Science and
Earth Science. Mr. Truesdell is listed in many publications regarding
Radioactive Placers, Uranium Potential, and Uranium Resource Evaluation in
several states.
Mr. Brian G. Russell, Director
- - ------------------------------
Mr. Russell, graduated from the University of Witwatersrand in 1951 with
degrees in geology and chemistry. He worked for nineteen years with the Council
for Mineral Technology (MINTEK) in South Africa doing analytical research,
established an X-Ray Fluorescence Section and directed the Development
Metallurgical Process Technology. While at MINTEK he presented and published
many scientific papers and supervised several masters and doctorate degrees. In
1974 he was appointed Director of the South African Minerals Bureau and
represented South Africa on the International Standards Organization Committee
for the standardization of Ferro alloys and received an award for meritorious
service from the American Institute for Mining, Metallurgical and Petroleum
Engineers. Mr. Russell of presently a consultant for USA and Canadian companies
that develop precious metals.
Mr. Jonathan Exter Downs, Secretary/Treasurer
- - ---------------------------------------------
Mr. Downs is a graduate of Mountain Lakes High School and has received his
BA from Curry College in Milton, Massachusetts, May of 1998. Mr. Downs was a
deans list student. Mr. Downs has traveled extensively in Europe and Africa and
is the son of Barry Downs, Senior Vice President with the investment firm, Legg
Mason Wood Walker, where he is an authority on gold and gold mining shares.
Jonathan is also the grandson of John Exter, an economist and central banker.
<PAGE>
Item 6. Executive Compensation
No compensation has teen awarded to, earned by, or paid to Officers and
Directors, during the last completed fiscal year or as of the date of the filing
of this Form 10-SB.
Item 7. Certain Relationships and Related Transactions
The Company presently has office space at 260 Garibaldi Avenue, Lodi, New
Jersey 07644. Which is the home of the President of American Precious Metals,
Inc., Jack Wagenti.
Item 8. Legal Proceedings
None
Item 9. Market for Common Equity and Related Stockholder Matters
(a) Market Information:
The Company's Common Stock was approved for trading on July 22, 1999 on the
Electronic Pink Sheets under the Symbol "ANPC." There is no assurance that the
Common Stock will continue to be quoted or that any liquidity exists for the
Company's Shareholders.The following table sets forth the weekly trade of high
and low prices for the Company's Common Stock on the Electronic Pink Sheets
during the inception of trading.
Weekended: High Low
--------- ----- -----
July 30, 1999 $0.03 $0.03
August 6,1999 $0.03 $0.03
August 13,1999 $0.03 $0.03
August 20,1999 $0.03 $0.03
August 27, 1999 $0.18 $0.18
September 3, 1999 $0.18 $0.18
September 10, 1999 $0.15 $0.15
September 17, 1999 $0.15 $0.15
September 24, 1999 $0.156 $0.156
October 1, 1999 $0.25 $0.25
October 8, 1999 $0.062 $0.062
October 15, 1999 $0.062 $0.062
October 22, 1999 $0.062 $0.062
October 29, 1999 $0.08 $0.08
The Source of this information is Quicken.com; quotation services and
broker-dealers making a market in the Company's Common Stock. These prices
reflect inter-dealer prices, without retail markup, mark-down or commission and
may riot represent actual transactions.
(b) Holders
As of September 1999, there were approximately 329 holders of record of the
Company's Common Stock (this number does not include beneficial owners who hold
shares at broker/dealers in "street-name").
(c) Dividends
The Company has paid no cash dividends on its Common Stock and management
does not anticipate that such dividends will be paid in the foreseeable future.
<PAGE>
Item 10. Recent Sales of Unregistered Securities
None
Item 11. Description of Securities Common Shares
The Company's Securities consist of 50,000,000 authorized common shares,
par value $.00001 of which 8,415,544 are presently issued and outstanding.
Dividends may be declared by the board of directors at any regular or special
meeting. Subject to section 170 of the Delaware Corporate Law which provides
impertinent part, that the directors of every corporation, subject to any
restrictions contained in its certificate of incorporation, may declare and pay
dividends upon the shares of its capital stock. or to its members if the
corporation is a non-stock corporation organized for profit, either (1) out of
its surplus, as defined in and computed in accordance with section 154 and 244
of this title, or (2) in case there shall be no such surplus out of its net
profits for the fiscal year in which the dividend is declared an or the
preceding fiscal year. Each share represents one vote at any shareholder
meeting. There are no preemption rights.
American Precious Metals, Inc.'s common stock is covered by a Securities
and Exchange Commission rule that imposes additional sales practice requirements
on broker-dealers who sell such securities to persons other than established
customers and accredited investors, generally institutions with assets in excess
of $5,000,000 or individuals with net worth in excess of $1,000,000 or annual
income exceeding $200,000 or $300,000 jointly with their spouse. For
transactions covered by the rule, the broker-dealer must make a special
suitability determination for the purchaser and transaction prior to the sale.
Consequently, the rule may affect the ability of broker-dealers to sell the
Company's securities and also may affect the ability of purchasers of our stock
to sell their shares in the secondary market.
Item 12. Indemnification of Directors and Officers
Section 1. of Article XI of the corporate by-laws provides as follows:
The corporation shall indemnify its officers, directors, employees and
agents to the extent permitted by the General Corporation Law of Delaware.
<PAGE>
Section 145 of the Delaware Corporation Law provides:
(a) A corporation shall have power to indemnity any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than action by or in the right of
the Corporation) by reason of the fact that [he] such person is or was a
director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer, employee
or agent for another corporation, partnership, joint venture, trust or
other enterprise, against expenses (including attorney's fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred by
[him] such person in connection with such action, suit or proceeding if
[he] such person acted in good faith and in a manner [he] such person
reasonably believed to be in or not opposed to the best interest of the
corporation, and with respect to any criminal action or proceeding, had no
reasonable cause to believe [his] such person's conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order
settlement, conviction or upon a plea of nolo contendere or its equivalent,
shall not of itself; create a presumption that the person did not act in
good faith and in a manner which [he] such person reasonably believed to be
in or not opposed to the best interests of the corporation, and with
respect to any criminal action or proceeding, had reasonable cause to
believe that [his] such person's conduct was unlawful.
(b) A corporation shall have power to indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action or Suit by or in the right of the corporation to procure a
judgment in its favor by reason of the fact that [he] such person is or was
a director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer. employee
or agent of another corporation, partnership, joint Venture, trust or other
enterprise, against expenses (including attorneys' fees), actually and
reasonably incurred by [him] such person in connection with the defense or
settlement of such action or suit if [he] such person acted in good faith
and in a manner [he] such person reasonably believed to be in or not
opposed to the best interests of the corporation and except that no
indemnification shall be made in respect of any claim, issue or matter as
to which such person shall have been adjudged to be liable to the
corporation unless and only to the extent that the Court of Chancery or the
court in which such action or suit was brought shall determine upon
allocation that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the Court of Chancery or such
other court shall deem proper.
(c) To the extent that a present or former director [officer, employee or
agent] or officer of a Corporation has been successful on the merits or
otherwise in defense or any action, suit or proceeding referred to in
subsections (a) and (b), or in defense or any claim. issue or matter
therein, [he] such person shall be indemnified against expenses (including
attorneys' fees) actually and reasonably incurred by [him] such person in
connection therewith.
<PAGE>
(d) Any indemnification under subsections (a) and (b) (unless ordered by a
court) shall be made by the corporation only as authorized in the specific
cue upon a determination that indemnification of the present or former
director. officer, employee or agent is proper in the circumstances because
[he] such person has met the applicable standard of conduct set forth in
subsections (a) and (b,). Such determination shall be made, with respect to
a person who is a director or officer at the time of such determination,
(1) by majority vote of the directors who are not parties to such action,
suit or processing, even though less than quorum, or (2) by a committee of
such directors designated by Majority vote of such directors, even though
less than a quorum, or ([2]3) if there are not such directors, or if such
directors so direct, by independent legal counsel in a written opinion, or
([3]4), by the stockholders.
(e) Expenses (including attorneys' fees) incurred by an officer or director
in defending any civil criminal, administrative, or investigative action,
suit or proceeding may be paid by the corporation in advance of the final
disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such director or officer to repay such
amount if it shall ultimately be determined that [he] such person is not
entitled to be indemnified by the corporation as authorized in this
Section. Such expenses (including attorneys' fees) incurred by former
directors and officers or other employees and agents may be so paid upon
such terms and conditions, if any, as the [board of directors] corporation
deems appropriate.
(f) The indemnification and advancement of expenses provided by, or granted
pursuant to, the other subsections of this section shall not be deemed
exclusive of any other rights to which those seeking indemnification or
advancement of expenses may be entitled under any by-law, agreement, vote
of stockholders or disinterested directors or otherwise, both as to action
in [his] such person's official capacity and as to action in another
capacity while holding such office.
(g) A corporation shall have the power to purchase and maintain insurance
on behalf of any person who is or was a director; officer, employee or
agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against
and liability asserted against [him] such person and incurred by [him] such
person in any such capacity, or arising out [his] such person's status as
such, whether or not the corporation would have the power to indemnify
[him] such person against such liability under the provisions of this
section.
(h) For purposes of this Section, references to "the corporation" shall
include, in addition to the resulting corporation, any constituent
corporation (including any constituent of a constituent) absorbed in a
consolidation or merger which, if its separate existence had continued,
would have had power and authority to indemnify its directors, officers,
and employees or agents, so that any person who is or was a director,
officer, employee or agent of such constituent corporation or is or was
serving at the request of such constituent corporation as a director,
officer, employee or agent of another corporation, partnership joint
venture, trust or other enterprise, shall stand in the same position under
the provisions of this Section with respect to the resulting or surviving
corporation as [he] such person would have with respect to such constituent
corporation if its separate existence had continued.
<PAGE>
(i) For purposes of this Section, references to other "enterprises" shall
include employee benefit plans, references to "fines" shall include any
excise taxes assessed on a person with respect to an employee benefit plan;
and references to "serving at the request of the corporation" shall include
any service as a director, officer, employee or agent of the corporation
which imposes duties on, or involves services by, such director, officer,
employee or agent with respect to an employee benefit plan, its
participants, beneficiaries. and a person who acted in good faith and in a
manner [he] such person reasonably believed to be in the interest of the
participants and beneficiaries of an employee benefit plan shall be deemed
to have acted in a manner "not opposed to the best interests of the
corporation" as referred to in this Section. (As amended by Ch. 120, Laws
of 1997.)
Item 13. Financial Statements
The information required by Item 13 and an index thereto commences on page
F-l, which pages follow this page.
Item 14. Changes In and Disagreement with Accountants on Accounting and
Financial Disclosure
None
Item 15. Financial Statements and Exhibits
a. Financial Statements for fiscal year ending May 31, 1999 and 1998 are
enclosed as part of Item 13 and commences on page F-1.
b. List of Exhibits
Exhibit Number Description
3.1 Certificate of Incorporation of Company filed with the
Secretary of State of Delaware on January 13, 1998.
3.2 Copy of the by-laws of the Company.
3.3 Specimen Stock Certificate
27 Financial Data Schedule
<PAGE>
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the
Registrant caused this registration statement to be signed on the behalf by the
undersigned, thereunto duly authorized.
AMERICAN PRECIOUS METALS, INC.
Date: November xx, 1999 By:/s/Jack Wagenti
------------------
Jack Wagenti
President
<PAGE>
AMERICAN PRECIOUS METALS, INC.
(A Development Stage Company)
TABLE OF CONTENTS TO FINANCIAL STATEMENTS
Report of Independent Certified Public Accountants . . . . . . . . . . . F-2
Balance Sheet for the fiscal years ended May 31, 1999 and 1998 . . . . . ...F-3
Statement of Operations and Accumulated Deficit -
for the fiscal years ended May 31,1999 and 1998 . . . . . . . . . . . . . . F-4
Statement of Cash Flows -
For the fiscal years ended May 31,1999 and 1998. . . . . . . . . . . . . . F-5
Statement of Stockholder's Deficiency -
For the period from inception (June 1, 1996) through May 31, 1999 . . . . ..F-6
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . ..F-9
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Stockholders and Board of Directors
American Precious Metals, Inc.
260 Garibaldi Avenue
Lodi, N.J. 07644
Gentlemen and Madames:
We have audited the accompanying comparative balance sheets of American
Precious Metals as of May 31, 1999 and 1998 and the related comparative
statements of operations and accumulated deficit, and cash flows for the years
then ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position as of May 31, 1999 and 1998,
and the results of its operations and its cash flows for the years then ended in
conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 4 to the
financial statements, the Company has suffered recurring losses from operations
and, as of May 31,1999 has a net capital deficiency that raise substantial doubt
about its ability to continue as a going concern. Management's plans in regard
to these matters are also described in Note 4. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
Our audits were made to form an opinion on the basic financial statements
taken as a whole. The supplemental schedules to the financial statements are
presented to comply with rules and regulations under the Securities and Exchange
Act of 1934 and are not otherwise a required part of the basic financial
statements. The supplementary schedule of changes in stockholder's deficiency
cumulative from inception through May 31, 1999, supplementary schedule of
operations and accumulated deficit cumulative from inception through May 31,
1999 and the supplementary schedule of cash flows cumulative from inception
through May 31, 1999 are presented for purposes of additional analysis and are
not a required part of the basic financial statements. With the exception of
information taken from the compilation statements of May 31, 1996 and May 31,
1997, the information has been subjected to the auditing procedures applied in
the audit of the basic financial statements and, in our opinion, is fairly
stated in all material respects in relation to the basic financial statements
taken as a whole.
/s/GERALD BRIGNOLA, CPA.,PA
October 8, 1999
Hackensack, NJ
F-2
<PAGE>
AMERICAN PRECIOUS METALS, INC.
(a development stage company)
BALANCE SHEET
May 31, 1999 and 1998
** 1999 ** ** 1998 **
ASSETS
CURRENT ASSETS
Cash in bank $ 5,604 $ 11,357
---------- ----------
Total Current Assets 5,604 11,357
PROPERTY & EQUIP
Equipment 11,567
Less Depreciation ( 378)
---------- ----------
11,189 0
OTHER ASSETS
Security deposit 675 675
---------- ----------
675 675
---------- ----------
TOTAL ASSETS $ 17,468 $ 12,032
========== ==========
LIABILITIES AND
STOCKHOLDERS S DEFICIENCY
CURRENT LIABILITIES
Accounts payable 12,291 8,824
Loan payable 23,976
---------- ----------
TOTAL CURRENT LIAB. 36,267 8,824
STOCKHOLDER'S EQUITY
Common stock (50,000,000 shares authorized
6,922,159 and 6,922,159 issued, par 6,923 6,923
value .001, respectfully
1,493,385 and 1,400,000 issued, par
value .00001, respectfully) 14 14
---------- -----------
6,937 6,937
Paid in capital 336,750 267,749
Accumulated (deficit) ( 362,486) ( 271,478)
---------- -----------
TOTAL STOCKHOLDER' S (DEFICIENCY) ( 18,799) ( 3,208)
---------- -----------
TOTAL LIABILITIES &
STOCKHOLDER' S DEFICIENCY $ 17,468 $ 12,032
========== ===========
See accountants' report and notes to financial statements
F-3
<PAGE>
AMERICAN PRECIOUS METALS, INC.
(a development stage company)
STATEMENTS OF OPERATIONS & ACCUMULATED DEFICIT
Year ended May 31, 1999 and 1998
** 1999 ** ** 1998 **
OPERATING EXPENSES
Entertainment $ 3,589 $ 11,606
Travel 14,586 32,481
Supplies 261 226
Laboratory costs 8,709 8,537
Small equipment/tools 206
Advertising 309
Professional fees 8,430 7,610
Automobile expense 2, 754
Interest & bank charges 222 171
Consulting fees 279 21,073
Depreciation 378
Dues & subscriptions 1,577
Insurance 23 7,766
License & fees 1,020
Legal 3,184 20,475
Maintenance 776
Office expense 4,481 6,274
Storage 600
Rent and lease expense 37, 145 38,198
Property tax 347 340
Corp tax/annual rept 360 640
State corporate tax 715
Telephone 4,563 5,068
----------- -----------
TOTAL OPERATING EXPENSES 91,008 163,971
----------- -----------
NET LOSS ( 91,008) ( 163,971)
Accumulated (deficit)-beginning ( 271,478) ( 107,507)
----------- -----------
Accumulated (deficit)-ending ($ 362,486) ($ 271,478)
=========== ===========
Earnings per share (.0430) (.0326)
=========== ===========
Earnings per share - fully diluted (.0430) (.0326)
=========== ===========
See accountants' report and notes to financial statements
F-4
<PAGE>
AMERICAN PRECIOUS METALS, INC.
(a development stage company)
STATEMENTS OF CASH FLOWS
Year ended May 31, 1999 and 1998
** 1999 ** ** 1998 **
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income / (Loss) ($ 91,008) ($ 163,971)
Adjustments to reconcile net income to net
cash provided by operating activities
Increase / (decrease) in cash:
Depreciation 378
Deposits ( 675)
Accounts payable 3,468 8,824
---------- -----------
Net cash provided by operating activities ( 87,162) ( 155,822)
CASH FLOWS FROM INVESTING ACTIVITIES
Sale of Stock 69,000 153,532
Sale / (purch): fixed assets ( 11,567)
---------- -----------
Net cash used by investing activities 57,433 153,532
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in loans payable 23,976
---------- -----------
Net cash provided by financing activities 23,976 0
---------- -----------
Net decrease in. cash and cash equivalent ( 5,753) ( 2,290)
Cash - beginning of year 11,357 13,647
---------- -----------
Cash - end of year $ 5,604 $ 11,357
========== ===========
See accountants' report and notes to financial statements
F-5
<PAGE>
AMERICAN PRECIOUS METALS, INC.
(a development stage company)
SUPPLEMENTARY SCHEDULE OF CHANGES IN STOCKHOLDERS' DEFICIENCY
Cumulative from Inception through May 31, 1999
<TABLE>
<CAPTION>
Deficit
Accumulated Total
Additional During Stock-
Common Stock Paid In Development holders
Shares Amount Surplus Stage Deficiency
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
LUCKY SEVEN GOLD MINES, INC
- - ---------------------------
Issuance of Common
Stock for Services
Directors & Officers 5,775,000 5,775 5,775
5/31/96
Issuance of Common
Stock for Services
& Consulting 770,000 770 770
5/31/96
Shares Issued for
Previous Payments of
Blackhawk Lease
5/31/96 320,000 320 320
Sale of Common Stock
for Cash in Private
Offering 6/1/96 thru
5/31/97 118,100 118 117,982 118,100
Shares Issued In
Exchange of Amerigold
& Sante Fe Common
Stock 10/7/96 thru
5/31/97 1,323,344 1,332 1,332
Common Stock
Rescinded 11/21/97 (1,720,000) (1,720) (1,720)
Issuance of
Common Stock for
Cash in Private
Offering 5/1/97
thru 3/15/98 148,500 149 148,351 148,500
Issuance of Common
Stock for Services
& Consulting 9/5/97 112,300 112 1,416 1,528
- - -----------------------------------------------------------------------------------------------------------------
Sub Total: 6,847,244 6,856 267,749 274,605
</TABLE>
F-6
<PAGE>
AMERICAN PRECIOUS METALS, INC.
(a development stage company)
SUPPLEMENTARY SCHEDULE OF CHANGES IN STOCKHOLDERS' DEFICIENCY
Cumulative from Inception through May 31, 1999
<TABLE>
<CAPTION>
Deficit
Accumulated Total
Additional During Stock-
Common Stock Paid In Development holders
Shares Amount Surplus Stage Deficiency
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Sub Total Forward: 6,847,244 6,856 267,749 274,605
Shares Issued in
Exchange of Amerigold
& Sante Fe Common Stock
6/1/97 thru 3/15/98 74,915 74 74
- - -----------------------------------------------------------------------------------------------------------------
Sub Total: 6,922,159 6,930 267,749 274,679
(See Note 6)
- - -----------------------------------------------------------------------------------------------------------------
AMERICAN PRECIOUS METALS, INC. (Surviving Company)
- - -----------------------------------------------------------------------------------------------------------------
Outstanding Shares 1,400,000 14 14
of APM 1/14/98
issued 5/20/98
Net Loss for the
Year Ended 5/31/97 (107,508) (107,508)
Net Loss for the
Year Ended 5/31/98 (163,970) (163,970)
Rounding Dollars (7) (7)
- - ------------------------------------------------------------------------------------------------------------------
Ending Balance
5/31/98 8,322,159 6,937 267,749 (271,478) 3,208
- - ------------------------------------------------------------------------------------------------------------------
Issuance of Common
Stock for Cash in
Private Offering
6/1/98 thru 5/31/99 69,000 69,000 69,000
Shares Issued in
Exchange of Amerigold
& Sante Fe Common Stock
6/1/98 thru 5/31/99 24,385
- - ------------------------------------------------------------------------------------------------------------------
Sub Total 8,415,544 6,937 336,749 (271,478) 72,208
</TABLE>
F-7
<PAGE>
AMERICAN PRECIOUS METALS, INC.
(a development stage company)
SUPPLEMENTARY SCHEDULE OF CHANGES IN STOCKHOLDERS' DEFICIENCY
Cumulative from Inception through May 31, 1999
<TABLE>
<CAPTION>
Deficit
Accumulated Total
Additional During Stock-
Common Stock Paid In Development holders
Shares Amount Surplus Stage Deficiency
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Sub Total Forward: 8,415,544 6,937 336,749 (271,478) 72,208
Rounding (1)
Net Income for the
Year Ended 5/31/99 (91,008) (91,008)
- - --------------------------------------------------------------------------------------------------------------------
Balance 5/31/99 8,415,544 6,937 336,749 (362,486) (18,799)
================================================================================
</TABLE>
F-8
See accountants' report and notes to financial statements
<PAGE>
AMERICAN PRECIOUS METALS, INC.
(A Development Stage company)
NOTES TO FINANCIAL STATEMENTS
May 31, 1999
Note 1. Summary of Significant Accounting Policies Reporting Entity.
Lucky Seven Gold Mines, Inc. was incorporated in the Commonwealth of
Pennsylvania on July 16, 1984. On March 16, 1998, Lucky Seven Gold
Mines, Inc. merged with American Precious Metals, a Delaware
Corporation, incorporated on January 13, 1998. The Surviving
corporation will be American Precious Metals, Inc. and maintains a
classification as a development stage company. Lucky Seven Gold Mines,
Inc. shareholders received an equivalent amount of shares from
American Precious Metals, Inc.
Activities to date have been limited to the sale of its common stock
securities. The company has, over a number of years, been developing a
process of technology relating to the testing of precious metals
mineralization. As more fully explained in Note 4, management of the
company has identified and intends to pursue new business
opportunities with other mining companies.
Method of accounting: The financial statements have been prepared in
accordance with the accrual basis method of accounting. Under this
method of accounting, income and expenses are identified with specific
periods of time and are recorded as earned or incurred without regard
to date of receipt or disbursement of cash.
Costs of securities registration - All costs incurred by the company
in connection with the pubic offering of the Company's common stock
securities were charged to expense.
Research and Development Costs: The Company charges research and
development costs, which are not incurred in conjunction with
contractual obligations, to expense as incurred.
Earnings Per Share: Computed by dividing the net loss by the weighted
average number of shares outstanding during the year. Common stock
equivalents have not been included in the earnings-per share
computation because of their anti-dilutive effect.
Estimates: The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that effect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities at
the dates of the financial statements and the reported amounts of
revenues and expenses during the reporting periods. Actual results
could differ from those estimates.
F-9
<PAGE>
Note 2. Issuance of Common Stock. The Company issued its common stock
according to a public offering made in accordance with and pursuant to
the provisions of Regulation D, Rule 504 as promulgated under the
Securities Act of 1933, as amended. The Company sold 100,100 founders
shares of common stock and 23,550 were units, at a price of $10.00 a
unit. Each unit consisted of Ten (10) shares of common stock, par
value $.001 per share and three redeemable common stock purchase
warrants. The redeemable common stock purchase warrants are designated
as Class "A", Class "B", and Class "C". Each class of redeemable
common stock purchase warrants will be exercisable for a period of six
months commencing twelve (12) , eighteen(18) and twenty four (24)
months respectively, from the date of the closing at an exercise price
of $1.50, $2.00 and $2.50. All or any portion of the Class "A", "B",
or "C" redeemable warrants can be called for at a redemption price of
one mil ($.00l) per redeemable warrant by the Company on a minimum of
thirty days written notice of call mailed to the registered holders of
the Class "A", "B", and "C" redeemable warrants, provided the closing
bid of the common stock exceeds $1.50 $2.06 and $2.50 per share for
ten (10) consecutive trading days prior to the notice of the
redemption. Any holder who does not exercise his redeemable Warrant
prior to the. date set for call, will receive the call price and will
forfeit his rights to purchase the common stock underlying the
redeemable warrants so called. The Company must have a current and
effective notification and/or offering memorandum or registration
statement and prospectus on tile with the Securities and Exchange
Commission in order for a redeemable common stock purchased warrant
holder to be able to exercise his redeemable warrant.
Note 3. Based on management's present assessment, the Company has not yet
determined it to be more likely than not that a deferred long term tax
asset of $119,618 attributable to the future utilization of $362,486
of net operating loss carry forwards as of May 31, 1999, will be
realized. Accordingly, the Company has provided a 100% allowance
against the deferred tax asset in the financial statements as May 31,
1999. The Company will continue to review this valuation allowance and
make adjustments as appropriate. The net operating. loss carry
forwards will expire as follows:
Year Amount
---- --------
2011 $ 33,703
2012 58,532
2013 27,383
--------
$119,618
========
F-10
<PAGE>
Note 4. Basis of Presentation - The accompanying financial statements have
been prepared on a going concern basis, which contemplates the
realization of assets and liquidation of liabilities in the normal
course of business. As shown in the financial statements, the Company
has experienced substantial operating losses. The continuation of the
Company as a going concern is dependent on its ability to generate
sufficient cash flqws to meet its obligations and sustain its
operations.
Managementof the Company has identified and intends to pursue new
business opportunities, which it believes will be profitable and plans
to infuse new equity capital into the Company. There are no
assurances, however, that management of the Company will be successful
with either the new business opportunities or raising new equity
capital.
Note 5. - Leases -
Office Lease - The Company is obligated under a lease for office space
for a one year period commencing on September 15, 1998 and ending on
September 15, 1999 with a monthly rental of $450 or $5400 annually.
Mining Lease - The Company accepted an assignment of a related party
lease on June 26, 1996 from Amerigold, Inc. and Santa Fe Gold Mines,
Inc. The shareholders of Amerigold, Inc. and Santa Fee Gold Mines,
Inc. agreed to transfer and relinquish control of the leases and all.
related benefits and obligation of their interest in land situated in
the County of San Bernardino, California, known as Black Hawk Mill
Site.
The term of the lease is for 20 years beginning on August 30, 1980 and
ending September 1, 2000. The Company has an option to renew the lease
for a second 20 year term with an option to purchase leased premises
for a total price of $1,000,000. The current monthly rental is $2,500
per month or $30,000 annually. Total remaining lease value is as
follows:
May 31, 1999 $30,000
May 31, 2000 30,000
August 31, 2000 7,500
-------
Total $67,500
=======
The Company is also obligated for royalty fees for any substances
mined, from leased property processed and marketed from the leased
premises at a rate of 8% of the "net smelter returns".
F-11
<PAGE>
The Company also have an option to buy the mountain at $1,000,000 less
previous rents and royalties paid to May 31, 1999, $515,500 for net
option price of $484,500. All Future monthly lease and royalty payment
will reduce the net option price accordingly.
NOTE 6. MERGERS AND ACQUISITIONS
On June 27, 1996, the shareholders of Santa Fe Gold Mines, Inc. and
Amerigold, Inc. agreed to the following exchange of shares.
I. Santa Fe Fold Mines, Inc.
(a) The principals of Santa Fe Gold Mines, Inc. agreed to accept
one share of Lucky Seven Gold Mines, Inc. stock in exchange
for three shares of Santa Fe Gold Mines, Inc.
(b) The remaining shareholders agreed to accept one share of
common stock in exchange for one share of Lucky Seven Gold
Mines Inc.
II. Amerigold, Inc.
(a) The shareholders agreed to accept one share of Lucky
Seven Gold Mines, Inc. in exchange for three shares of
Amerigold, Inc.
III American Precious Metals, Inc.
On March 16, 1998, 6,922,159 shares of Lucky Gold Mines were
exchanged for 6,922,159 shares of American Precious Metals.
The total number of outstanding shares of the surviving
company (American Precious Metals, Inc.) were unchanged by
this stock swap. The only outstanding shares of American
Precious Metals, Inc. before the merger were 1,400,000
shares. Total outstanding shares after the merger were
8,322,159 shares. The surviving company is American Precious
Metals Inc.
Due to the fact that there is no market value for either Santa Fe Gold
Mines, Inc. or Amerigold, Inc., the financial statements do not
reflect any value for these securities.
NOTE 7. OTHER MATTERS
Management has informed us that they do not anticipate any problems
with their computers in the year 2000. The computer will recognize 00
as 2000 and not 1900; therefore, no expenditures are anticipated in
this matter.
F-12
<PAGE>
EXHIBIT INDEX
Exhibit No Description Page
- - ---------- ---------------------------------------- ----
3.1 Certificate of Incorporation of Company 2
filed with the Secretary of State of
Delaware on January 31, 1998
3.2 Copy of the by-laws of the Company 3
3.3 Specimen Stock Certificate 11
27 Financial Data Schedule
1
CERTIFICATE OF INCORPORATION Exhibit 3.1
for
American Precious Metals, Inc.
I, the undersigned, for the purposes of incorporating and organizing a
corporation under the General Corporation Law of the State of Delaware, do
execute this Certificate of Incorporation and do hereby certify as follows:
FIRST: The name of the Corporation is American Precious Meta1s, Inc.
SECOND: Its registered office is to be located at Suite 606, 1220 N. Market St.,
Wilmington, DE 19801, County of New Castle. The name of the registered agent at
such address is Registered Agents, Ltd.
THIRD: The purpose of the corporation is to engage in any lawful act or activity
for which corporations may be organized under the Delaware General Corporation
Laws.
FOURTH: The amount of total authorized capital nook of the corporation is fifty
million (50,000,000). All such shares are to be with a par value of $.00001 and
are to be of one class.
FIFTH: The incorporator of the corporation is Jennifer C. Toscano, whose mailing
address is Suite 606, 1220 N. Market St., Wilmington, DE 19801 -
SIXTH: Unless and except to the extent that the by-laws of the corporation shall
so require, the election of directors of the corporation need not be by written
ballot
SEVENTH: In furtherance and not in limitation of the powers. conferred by the
laws of the State of Delaware, the Board of Directors of the corporation is
expressly authorized to make, alter and repeal the by-laws of the corporation,
subject to the power of the stockholders of the corporation to alter or repeal
any by-law whether adopted by them or otherwise.
EIGHTH: A director or the corporation shall not be liable to the corporation or
its stockholders for monetary damages from breach of fiduciary duty as a
director, except to the extent such exemption from liability or limitation
thereof is not permitted under the General Corporation Law of the state of
Delaware as the same exists or may hereafter be amended. Any amendment,
modification or repeal of the foregoing sentence shall not adversely affect any
right or protection of a director of the corporation hereunder in respect of any
act of omission occurring prior to the time of such amendment, modification or
repeal.
NINTH: The corporation reserves the right at any time, and from time to time, to
amend, alter, change or repeal any provision contained in this Certificate of
Incorporation, and other provisions authorized by the laws of the State of
Delaware at the time in force may be added or inserted, in the manner now or
hereafter prescribed by law,' and all rights, preferences and privileges of
whatsoever nature conferred upon stockholders, directors or any other persons
whomsoever by and pursuant to this Certificate of Incorporation in its present
form or as hereafter amended are granted subject to the rights reserved in this
article.
TENTH: The powers of the incorporator are to terminate upon filing of this
Certificate. The name and mailing address of the person(s) who is to serve as
the initial director until the first annual meeting of stockholders of the
corporation, or until a successor(s) is elected and qualified, is Jack Wagenti,
420 Boulevard, Suite 203, Mountain Lakes, NJ, 07046-
The undersigned incorporator hereby acknowledges that the foregoing
certificate of incorporation is her act and deed on this thirteenth day of
January, 1998.
\s\Jennifer C. Toscano
----------------------
INCORPORATOR
STATE OF DELAWARE
SECRETARY OP STATE
DIVISION OF INCORPORATIONS
FILED 09:00 AM 01/13/1998
981014395 - 2845707
2
BY-LAWS Exhibit 3.2
ARTICLE I - OFFICES
Section 1. The registered office of the corporation in the State of
Delaware shall be at
1220 North Market Street, Suite 606
Wilmington, Delaware 19801
The registered agent in charge thereof shall be Registered Agents, LTD.
Section 2. The corporation may also have offices at such other places as
the Board of Directors may from time to time appoint or the business of the
corporation may require.
ARTICLE II - SEAL
Section 1. The corporate seal shall have inscribed thereon the name of the
corporation, the year of its organization and the words "Corporate Seal,
Delaware".
ARTICLE III - STOCKHOLDERS' MEETINGS
Section 1. Meetings of stockholders shall be held at the registered office
of the corporation in this state or at such place, either within or without this
state, as may be selected from time to time by the Board of Directors.
Section 2. ANNUAL MEETINGS: The annual meeting of the stockholders shall be
held on the 31st of May in each year if not a legal holiday, and if a legal
holiday, then on the next secular day following at "4:00" o'clock p.m., when
they shall elect a Board of Directors and transact such other business as may
properly be brought before the meeting. If the annual meeting for election of
directors is not held on the date designated therefor, the directors shall cause
the meeting to be held as soon thereafter as convenient.
Section 3. ELECTION OF DIRECTORS: Elections of the directors of the
corporation shall be by written ballot.
Section 4. SPECIAL MEETINGS: Special meetings of the stockholders may be
called at any time by the President, or the Board of Directors, or stockholders
entitled to cast at least one-fifth of the votes which all stockholders are
entitled to cast at the particular meeting. At any time, upon written request of
any person or persons who have duly called a special meeting, it shall be the
duty of the Secretary to fix the date of the meeting, to be held not more than
sixty days after receipt of the request, and to give due notice thereof. If the
Secretary shall neglect or refuse to fix the date of the meeting and give notice
thereof, the person or persons calling the meeting may do so.
Business transacted at all special meetings shall be confined to the
objects stated in the call and matters germane thereto, unless all stockholders
entitled to vote are present and consent.
3
<PAGE>
Written notice of a special meeting of stockholders stating the time and
place and object thereof, shall be given to each stockholder entitled to vote
thereat at least ten days before such meeting, unless a greater period of notice
is required by statute in a particular case.
Section 5. QUORUM: A majority of the outstanding shares of the corporation
entitled to vote, represented in person or by proxy, shall constitute a quorum
at a meeting of stockholders. If less than a majority of the outstanding shares
entitled to vote is represented at a meeting, a majority of the shares so
represented may adjourn the meeting from time to time without further notice. At
such adjourned meeting at which a quorum shall be present or represented, any
business may be transacted which might have been transacted at the meeting as
originally noticed. The stockholders present at a duly organized meeting may
continue to transact business until adjournment, notwithstanding the withdrawal
of enough stockholders to leave less than a quorum.
Section 6. PROXIES: Each stockholder entitled to vote at a meeting of
stockholders or to express consent or dissent to corporate action in writing
without a meeting may authorize another person or persons to act for him by
proxy, but no such proxy shall be voted or acted upon after three years from its
date, unless the proxy provides for a longer period.
A duly executed proxy shall be irrevocable if it states that it is
irrevocable and if, and only as long as, it is coupled with an interest
sufficient in law to support an irrevocable power. A proxy may be made
irrevocable regardless of whether the interest with which it is coupled is an
interest in the stock itself or an interest in the corporation generally. All
proxies shall be filed with the Secretary of the meeting before being voted
upon.
Section 7. NOTICE OF MEETINGS: Whenever stockholders are required or
permitted to take any action at a meeting, a written notice of the meeting shall
be given which shall state the place, date and hour of the meeting, and, in the
case of a special meeting, the purpose or purposes for which the meeting is
called. Unless otherwise provided by law, written notice of any meeting shall be
given not less than ten nor more than sixty days before the date of the meeting
to each stockholder entitled to vote at such meeting.
Section 8. CONSENT IN LIEU OF MEETINGS: Any action required t be taken at
any annual or special meeting of stockholders of a corporation, or any action
which may be taken at any annual or special meeting of such stockholders, may be
taken without a meeting, without prior notice and without a vote, if a consent
in writing, setting forth the action so taken, shall be signed by the holders of
outstanding stock having not less than the minimum number of votes that would be
necessary to authorize or take such action at a meeting at which all shares
entitled to vote thereon were present and voted. Prompt notice of the taking of
the corporate action without a meeting by less than unanimous written consent
shall be given to those stockholders who have not consented in writing.
4
<PAGE>
Section 9. LIST OF STOCKHOLDERS: The officer who has charge of the stock
ledger of the corporation shall prepare and make, at least ten days before every
meeting of stockholders, a complete list of the stockholders entitled to vote at
the meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each stockholder.
No share of stock upon which any installment is due and unpaid shall be voted at
any meeting. The list shall be open to the examination of any stockholder, for
any purpose germane to the meeting, during ordinary business hours, for a period
of at least ten days prior to the meeting, either at a place within the city
where the meeting is to be held, which place shall be specified in the notice of
the meeting, or, if no so specified, at the place where the meeting is to be
held. The list shall also be produced and kept at the time and place of the
meeting during the whole time thereof, and may be inspected by any stockholder
who is present.
ARTICLE IV - DIRECTORS
Section 1. The business and affairs of this corporation shall be managed by
its Board of Directors, seven in number. The directors need not be residents of
this state or stockholders in the corporation. They shall be elected by the
stockholders at the annual meeting of stockholders of the corporation, and each
director shall be elected for the term of one year, and until his successor
shall be elected and shall qualify or until his earlier resignation or removal.
Section 2. REGULAR MEETINGS: Regular meetings of the Board shall be held
without notice at 420 Boulevard, Suite 203, Mountain Lakes, NJ 07046, or at such
other time and place as shall be determined by the Board.
Section 3. SPECIAL MEETINGS: Special Meetings of the Board may be called by
the President on three days notice to each director, either personally or by
mail or by telegram; special meetings shall be called by the President or
Secretary in like manner and on like notice on the written request of a majority
of the directors in office.
Section.4. QUORUM: A majority of the total number of directors shall
constitute a quorum for the transaction of business.
Section 5. CONSENT IN LIEU OF MEETING: Any action required or permitted to
be taken at any meeting of the Board of Directors, or of any committee thereof,
may be taken without a meeting if all members of the Board or committee, as the
case may be, consent thereto in writing, and the writing or writings are filed
with the minutes of proceedings of the Board or committee. The Board of
Directors may hold its meetings, and have an office or offices, outside of this
state.
Section 6. CONFERENCE TELEPHONE: One or more directors may participate in a
meeting of the Board, of a committee of the Board or of the stockholders by
means of conference telephone or similar communications equipment by means of
which all persons participating in the meeting can hear each other;
participation in this manner shall constitute presence in person at such
meeting.
Section 7. COMPENSATION: Directors as such, shall not receive any stated
salary for their services, but by resolution of the Board, a fixed sum and
expenses of attendance, if any, may be allowed for attendance at each regular or
special meeting of the Board PROVIDED, that nothing herein contained shall be
construed to preclude any director from serving the corporation in any other
capacity and receiving compensation therefor.
5
<PAGE>
Section 8. REMOVAL: Any director or the entire Board of Directors may be
removed, with or without cause, by the holders of a majority of the shares then
entitled to vote at an election of directors, except that when cumulative voting
is permitted, if less than the entire Board is to be removed, no director may be
removed without cause if the votes cast against his removal would be sufficient
to elect him if then cumulatively voted at an election of the entire Board of
Directors; or, if there be classes of directors, at an election of the class of
directors of which he is a part.
ARTICLE V - OFFICERS
Section 1. The executive officers of the corporation shall be chosen by the
directors and shall be a President, Secretary and Treasurer. The Board of
Directors may also choose a Chairman, one or more Vice Presidents and such other
officers as it shall deem necessary Any number of offices may be held by the
same person.
Section 2. SALARIES: Salaries of all officers and agents of the corporation
shall be fixed by the Board of Directors.
Section 3. TERM OF OFFICE: The officers of the corporation shall hold
office for one year and until their successors are chosen and have qualified.
Any officer or agent elected or appointed by the Board may be removed by the
Board of Directors whenever in its judgment the best interest of the corporation
will be served thereby.
Section 4. PRESIDENT: The President shall be the chief executive officer of
the corporation; he shall preside at all meetings of the stockholders and
directors; he shall have general and active management of the of the business of
the corporation, shall see that all orders and resolutions of the Board are
carried into effect, subject, however, to the right of the directors to delegate
any specific powers, except such as may be by statute exclusively conferred on
the President, to any other officer or officers of the corporation. He shall
execute bonds, mortgages and other contracts requiring a seal, under the seal of
the corporation. He shall be EX-OFFICIO a member of all committees, and shall
have the general power and duties of supervision an management usually vested in
the office of President of a corporation.
Section 5. SECRETARY: The Secretary shall attend all sessions of the Board
and all meetings of the stockholders and act as clerk thereof, and record all
the votes of the corporation and the minutes of all its transactions in a book
to be kept for that purpose, and shall perform like duties for all committees of
the Board of Directors when required. He shall give, or cause to be given,
notice of all meetings of the stockholders and of the Board of Directors, and
shall perform such other duties as may be prescribed by the Board of Directors
or President, and under whose supervision he shall be. He shall keep in safe
custody the corporate seal of the corporation, and when authorized by the Board,
affix the same to any instrument requiring it.
Section 6. TREASURER: The Treasurer shall have custody of the corporate
funds and securities and shall keep full and accurate accounts of receipts and
disbursements in books belonging to the corporation, and shall keep the moneys
of the corporation in a separate account to the credit of the corporation. He
shall disburse the funds of the corporation as may be ordered by the Board,
taking proper vouchers for such disbursements, and shall render to the President
and directors, at the regular meetings of the Board, or whenever they may
require it, an account of all his transactions as Treasurer and of the financial
condition of the corporation.
6
<PAGE>
ARTICLE VI - VACANCIES
Section 1. Any vacancy occurring in any office of the corporation by death,
resignation, removal or otherwise, shall be filled by the Board of Directors.
Vacancies and newly created directorships resulting from any increase in the
authorized number of directors may be filled by a majority of the directors then
in office, although less than a quorum, or by a sole remaining director. If at
any time by reason of death or resignation or other cause, the corporation
should have no directors in office, then any officer or any stockholder or an
executor, administrator, trustee or guardian of a stockholder, or other
fiduciary entrusted with like responsibility for the person or estate of a
stockholder, may call a special meeting of stockholders in accordance with the
provisions of these By-Laws.
Section 2. RESIGNATIONS EFFECTIVE AT FUTURE DATE: When one or more
directors shall resign from the Board, effective at a future date, a majority of
the directors then in office, including those who have so resigned, shall have
power to fill such vacancy or vacancies, the vote thereon to take effect when
such resignation or resignations shall become effective.
ARTICLE VII - CORPORATE RECORDS
Section 1. Any stockholder of record, in person or by attorney or other
agent, shall, upon written demand under oath stating the purpose thereof, have
the right during the usual hours for business to inspect for any proper purpose
the corporation's stock ledger, a list of its stockholders, and its other books
and records, and to make copies or extracts therefrom. A proper purpose shall
mean a purpose reasonably related to such person's interest as a stockholder. In
every instance where an attorney or other agent shall be the person who seeks
the right to inspection, the demand under oath shall be accompanied by a power
of attorney or such other writing which authorizes the attorney or other agent
to so act on behalf of the stockholder. The demand under oath shall be directed
to the corporation at its registered office in this state or at its principal
place of business.
ARTICLE VIII - STOCK CERTIFICATES, DIVIDENDS, ETC.
Section 1. The stock certificates of the corporation shall be numbered and
registered in the share ledger and transfer books of the corporation as they are
issued. They shall bear the corporate seal and shall be signed by the President
and Secretary.
Section 2. TRANSFERS: Transfers of shares shall be made on the books of the
corporation upon surrender of the certificates therefor, endorsed by the person
named in the certificate or by attorney, lawfully constituted in writing. No
transfer shall be made which is inconsistent with law.
Section 3. LOST CERTIFICATE: The corporation may issue a new certificate of
stock in the place of any certificate theretofore signed by it, alleged to have
been lost, stolen or destroyed, and the corporation may require the owner of the
lost, stolen or destroyed certificate, or his legal representative to give the
corporation a bond sufficient to indemnify it against any claim that may be made
against it on account of the alleged loss theft or destruction of any such
certificate or the issuance of such new certificate.
Section 4. RECORD DATE: In order that the corporation may determine the
stockholders entitled to notice of or to vote at any meeting of stockholders or
any adjournment thereof, or to express consent to corporate action in writing
without a meeting, or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock or for the purpose of an
other lawful action, the Board of Directors may fix, in advance, a record date,
which shall not be more than sixty nor less than ten days before the date of
such meeting, nor more than sixty days prior to any other action.
7
<PAGE>
If no record date is fixed:
(a) The record date for determining stockholders entitled to notice of or
to vote at a meeting of stockholders shall be. at the close of business on the
day next preceding the day on which notice is given, or, if notice is waived, at
the close of business on the day next preceding the day on which the meeting is
held.
(b) The record date for determining stockholders entitled to express
consent to corporate action in writing without a meeting, when no prior action
by the Board of Directors is necessary, shall be the day on which the first
written consent is expressed.
(c) The record date for determining stockholders for any other purpose
shall be at the close of business on the day on which the Board of Directors
adopts the resolution relating thereto.
(d) A determination of stockholders of record entitled to notice of or to
vote at a meeting of stockholders shall apply to any adjournment of the meeting;
provided, however, that the Board of Directors may fix a new record date for the
adjourned meeting.
Section 5. DIVIDENDS: The Board of Directors may declare and pay dividends
upon the outstanding shares of the corporation, from time to time and to such
extent as they deem advisable, in the manner and upon the terms and conditions
provided by statute and the Certificate of Incorporation.
Section 6. RESERVES: Before payment of any dividend there may be set aside
out of the net profits of the corporation such sum or suns as the directors,
from time to time, in their absolute discretion, think proper as a reserve fund
to meet contingencies, or for equalizing dividends, or for repairing or
maintaining any property of the corporation, or for such other purpose as the
directors shall think conducive to the interests of the corporation, and the
directors may abolish any such reserve in the manner in which it was created.
ARTICLE IX - MISCELLANEOUS PROVISIONS
Section 1. CHECKS: All checks or demands for money and notes of the
corporation shall be signed by such officer or officers as the Board of
Directors may from time to time designate.
Section 2. FISCAL YEAR: The fiscal year shall begin on the first day of
June.
Section 3. NOTICE: Whenever written notice is required to be given to any
person, it may be given to such person, either personally or by sending a copy
thereof through the mail, or by telegram, charges prepaid, to his address
appearing on the books of the corporation, or supplied by him to the corporation
for the purpose of notice. If the notice is sent by mail or by telegraph, it
shall be deemed to have been given to the person entitled thereto when deposited
in the United States mail or with a telegraph office for transmission to such
person. Such notice shall specify the place, day and hour of the meeting and, in
the case of a special meeting of stockholders, the general nature of the
business to be transacted.
Section 4. WAIVER OF NOTICE: Whenever any written notice is required by
statute, or by the Certificate or the By-Laws of this corporation a waiver
thereof in writing, signed by the person or persons entitled to such notice,
whether before or after the time stated therein, shall be deemed equivalent to
the giving of such notice. Except in the case of a special meeting of
stockholders, neither the business to be transacted at nor the purpose of the
meeting need be specified in the waiver of notice of such meeting. Attendance of
a person either in person or by proxy, at any meeting shall constitute a waiver
of notice of such meeting, except where a person attends a meeting for the
express purpose of objecting to the transaction of any business because the
meeting was not lawfully called or convened.
8
<PAGE>
Section 5. DISALLOWED COMPENSATION: Any payments made to an officer or
employee of the corporation such as a salary, commission, bonus, interest, rent,
travel or entertainment expense incurred by him, which shall be disallowed in
whole or in part as a deductible expense by the Internal Revenue Service, shall
be reimbursed by such officer or employee to the corporation to the full extent
of such disallowance. It shall be the duty of the directors, as a Board, to
enforce payment of each such amount disallowed. In lieu of payment by the
officer or employee, subject to the determination of the directors,
proportionate amounts may be withheld from his future compensation payments
until the amount owed to the corporation has been recovered.
Section 6. RESIGNATIONS: Any director or other officer may resign at any
time, such resignation to be in writing and to take effect from the time of its
receipt by the corporation, unless some time be fixed in the resignation and
then from that date. The acceptance of a resignation shall not be required to
make it effective.
ARTICLE X - ANNUAL STATEMENT
Section 1. The President and the Board of Directors shall present at each
annual meeting a full and complete statement of the business and affairs of the
corporation for the preceding year. Such statement shall be prepared and
presented in whatever manner the Board of Directors shall deem advisable and
need not be verified by a Certified Public Accountant.
ARTICLE XI - INDEMNIFICATION AND INSURANCE:
Section 1. (a) RIGHT To INDEMNIFICATION. Each person who was or is made a
party or is threatened to be made a party or is involved in any action, suit or
proceeding, whether civil, criminal, administrative or investigative
(hereinafter a "proceeding"), by reason of the fact that he or she, or a person
of whom he or she is the legal representative, is or was a director or officer,
of the Corporation or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation or of a partnership,
joint venture, trust or other enterprise, including service with respect to
employee benefit plans, whether the basis of such proceeding is alleged action
in an official capacity as a director, officer, employee or agent or in any
other capacity while serving as a director, officer, employee or agent, shall be
indemnified and held harmless by the Corporation to the fullest extent
authorized by the Delaware General Corporation Law, as the same exists or may
hereafter be amended (but, in the case of any such amendment, only to the extent
that such amendment permits the Corporation to provide broader indemnification
rights than said law permitted the Corporation to provide prior to such
amendment), against all expense, liability and loss (including attorneys' fees,
judgments, fines, ERISA excise taxes or penalties and amounts paid or to be paid
in settlement) reasonably incurred or suffered by such person in connection
therewith and such indemnification shall continue as to a person who has ceased
to be a director, officer, employee or agent and shall inure to the benefit of
his or her heirs, executors and administrators; provided, however, that, except
as provided in paragraph (b) hereof, the Corporation shall indemnify any such
person seeking indemnification in connection with a proceeding (or part thereof)
initiated by such person only if such proceeding (or part thereof) was
authorized by the Board of Directors of the Corporation. The right to
indemnification conferred in this Section shall be a contract right and shall
include the right to be paid by the Corporation the expenses incurred in
defending any such proceeding in advance of its final disposition; provided,
however, that, if the Delaware General Corporation Law requires, the payment of
such expenses incurred by a director or officer in his or her capacity as a
director or officer (and not in any other capacity in which service was or is
rendered by such person while a director or officer, including, without
limitation, service to an employee benefit plan) in advance of the final
disposition of a proceeding, shall be made only upon delivery to the corporation
of an undertaking, by or on behalf of such director or officer, to repay all
amounts so advanced if it shall ultimately be determined that such director or
officer is not entitled to be indemnified under this Section or otherwise. The
Corporation may, by action of its Board of Directors, provide indemnification to
employees and agents of the Corporation with the same scope and effect as the
foregoing indemnification of directors and officers.
9
<PAGE>
(b) RIGHT OF CLAIMANT TO BRING SUIT: If a claim under paragraph (a) of this
Section is not paid in full by the Corporation within thirty days after a
written claim has been received by the Corporation, the claimant may at any time
thereafter bring suit against the Corporation to recover the unpaid amount of
the claim and, if successful in whole or in part, the claimant shall be entitled
to be paid also the expense of prosecuting such claim. It shall be a defense to
any such action (other than an action brought to enforce a claim for expenses
incurred in defending any proceeding in advance of its final disposition where
the required undertaking, if any is required, has been tendered to the
Corporation) that the claimant has not met the standards of conduct which make
it permissible under the Delaware General Corporation law for the Corporation to
indemnify the claimant for the amount claimed, but the burden of proving such
defense shall be on the Corporation. Neither the failure of the Corporation
(including its Board of Directors, independent legal counsel, or its
stockholders) to have made a determination prior to the commencement of such
action that indemnification of the claimant is proper in the circumstances
because he or she has met the applicable standard of conduct set forth in the
Delaware General Corporation Law, nor an actual determination by the Corporation
(including its Board of Directors, independent legal counsel, or its
stockholders) that the claimant has not met such applicable standard or conduct,
shall be a defense to the action or create a presumption that the claimant has
not met the applicable standard or conduct.
(c) Notwithstanding any limitation to the contrary contained in
sub-paragraphs (a) and (b) of this section, the corporation shall, to the
fullest extent permitted by Section 145 of the General Corporation Law of the
State of Delaware, as the same may be amended and supplemented, indemnify any
and all persons whom it shall have power to indemnify under said section from
and against any and all of the expenses, liabilities or other matters referred
to in or covered by said section, and the indemnification provided for herein
shall not be deemed exclusive of any other rights to which those indemnified may
be entitled under any By-law, agreement, vote of stockholders or disinterested
Directors or otherwise, both as to action in his official capacity and as to
action in another capacity while holding such office, and shall continue as to a
person who has ceased to be director, officer, employee or agent and shall inure
to the benefit of the heirs, executors and administrators of such a person.
(d) INSURANCE: The Corporation may maintain insurance, at its expense, to
protect itself and any director, officer, employee or agent of the Corporation
or another corporation, partnership, joint venture, trust or other enterprise
against any such expense, liability or loss, whether or not the Corporation
would have the power to indemnify such person against such expense, liability or
loss under the Delaware General Corporation Law.
ARTICLE XII - AMENDMENTS
Section 1. These By-Laws may be amended or repealed by the vote of
stockholders entitled to cast at least a majority of the votes which all
stockholders are entitled to cast thereon, at any regular or special meeting of
the stockholders, duly convened after notice to the stockholders of that
purpose.
10
CUSIP NO 028916 10 4
NUMBER SHARES
AMERICAN PRECIOUS METALS, INC.
AUTHORIZED COMMON STOCK: 50,000,000 SHARES
PAR VALUE: $.00001
THIS CERTIFIES THAT
IS THE RECORD HOLDER
-SHARES OF AMERCIAN PRECIOUS METALS, INC. COMMON STOCK-
transferable on the books of the Corporation by the holder hereof in person or
by duly authorized attorney upon surrender of this certificate properly
endorsed. This certificate is not valid until countersigned by the Transfer
Agent and registered by the Registrar.
Witness the facsimile seal of the Corporation and the facsimile signatures of
its duly authorized officers.
DATED:
Secretary President
11
<PAGE>
NOTICE: Signature must be guaranteed by a firm which is a member of a registered
national stock exchange, or by a bank(other than a savings bank),or a trust
company. The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT -_____Custodian______
TEN ENT - as tenants by the entireties (Cust) (Minor)
JT TEN - as joint tenants with right of under Uniform Gifts to Minors
survivorship and not as tenants Act________________________
in common (State)
Additional abbreviations may also be used through not in the above list.
For value received, _______________________hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
________________________________________________________________________________
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE OF ASSIGNEE)
________________________________________________________________________________
________________________________________________________________________________
__________________________________________________________________________Shares
of the capital stock represented by the within Certificate, and do hereby
irrevocably constitute and appoint
____________________________________________________________________Attorney
to transfer the said stock on the books of the within named Corporation with
full power of substitution in the premises.
Dated_________________________
NOTICE:____________________________________________________
The signature of this assignment must correspond with
the name as written upon the face of the Certificate in
every particular, without alteration or enlargement or any
change whatever.
12
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0
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